The fact that Ireland had the second highest primary government expenditure as a share of economy of all countries. A burden of Government that is, frankly, unprecedented for a mature, competitive economy, especially when one considers the fact that we, Irish taxpayers, receive virtually nothing exceptional in return for our cash.

We managed to have the fifth highest proportion of public spending that is being swallowed by pay to our grossly over-compensated public sector workers. Denmark, Iceland, Malta and Sweden were ahead of us in these terms. I can't vouch for Malta, but in all three other states, taxpayers get a lot more services for their money.

Crucially, none of our competitors - smaller open economies that actually do create jobs - had the size or the structure of public spending close to that of Ireland.

Our generosity of the social benefits is significantly above average in absolute terms. When one realizes that the other countries we are being compared against all have older populations and higher unemployment (remember - these are 2008 figures), we can safely claim that Irish social benefits system is amongst the top two most generously funded in the entire developed world.

Now, consider how these expenditures are allocated relative to the total primary Government budget:Table 3a. Expenditure Structure: Advanced Economies, 2008 (as a share of the total primary expenditure)Table above shows that:

Ireland had the second largest proportion of its primary expenditure allocated to the capital budget in 2008. Lest we forget, parts of the Irish Government's capital budget, under the NDP accrue to personnel spending as well - including NDP-specified expenditures on 'human capital', and other soft things.

The above clearly distorts spending priorities reflected in employees compensation and social benefits shares of total primary spending.

Despite this, our public sector employees have still manged to capture a greater share of the total primary spending that average.

It is also worth noting that some countries with greater share of public expenditure accruing to the employees' compensation include countries with functions defense forces, such as Israel and members of NATO.

Disclaimer

This blog represents my personal views and is not reflective of the views or opinions held by any company, contractor, client or employer I work for currently or have worked for in the past. These views are not an endorsement to take any action in the markets or of any political position, figures or parties.

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